With a quarter plus under our belt, 2017 is shaping up to be a very interesting year in Northern Colorado real estate. With continued lack in inventory, prices continue to increase sharply, even over record numbers from 2016. It was once thought sales could not creep any lower because the amount of homes on the market was critically low. This past month, sales seem to have held steady or increased, atleast in Loveland and Fort Collins. Greeley continues to struggle to increase sales.
Because of Greeley's lack of homes for sale, prices continue escalating, up nearly 10% from this point last year. A 10% increase in homes will double a home's value in just 7.5 years. Certainly this level of price increase is not sustainable, but until demand declines or supply increases, these levels of increase will become the norm. What is promising is that sales in Fort Collins and Loveland are HIGHER than 2016 levels, which could signal a bit of a win for homebuyers, eager to see more homes to pick from. Although a win is tough to swallow when prices are higher and higher every month.
The slight dip in interest rates have helped buyers manage higher prices, albeit, low rates will not be a shelter for long. Even with low interest rates, median values of $400,000+ will be a tough pill for buyers to swallow. We do not know how much higher prices can go before buyers and new residents of Northern Colorado will say "enough is enough". Many of you read the article in the Denver Post about a major slump coming towards the end of 2019 and extending through 2022. To me, this was nothing more than an advertisement for article's subject real estate statistics software. Predicting a 20%+ drop in home prices is of course, sensational, and will get plenty of eyeballs reading on. What the article lacked was any statistical reasoning, forecasting or concrete evidence. That's where I come in. If you're worried about the sky falling, let's grab a beer to discuss the market. I've been tracking the market, personally, since I entered the industry. I'm personally buying, still. Instead of worrying about potential market slumps, let's work together on working towards a more affordable and sustainable market, one that can weather any storm.